Thailand’s Manufacturing Production Index (MPI) saw a 1.5% year-on-year decline in May, dropping to 98.3 points, highlighting a sluggish manufacturing sector despite export growth, as reported by the Office of Industrial Economics (OIE).
The reduction is largely attributed to a significant decrease in domestic car sales, notably in the pickup segment, and minimal new orders for fashion clothing within the garment industry.
Director-General of the OIE, Warawan Chitaroon, noted that the automotive and garment sectors faced challenges amidst the country’s economic slowdown and uncertainties arising from global geopolitical tensions.
Economic conditions in Thailand have been challenging for households and businesses, with elevated energy costs and high household debt leading banks to adopt a more cautious approach in granting car loans.
Nevertheless, certain industries such as computers, printers, aluminum, and wood products saw export increases.
Non-gold industrial goods shipments rose by 2.9% year-on-year in May for the second consecutive month, according to the OIE.
While economic indicators in the EU and Japan showed positive trends, with expectations of improved manufacturing sectors in the future, palm oil production notably grew by 19.8% year-on-year in May due to drought conditions and increased sunlight accelerating palm ripening.
Steel and iron output also increased by 8.1% year-on-year, driven partially by higher demand for state development projects.
For the initial five months of the year, the MPI decreased by 2.08% year-on-year to 98.1 points, with capacity utilization at 59.3% during this period.
Mrs. Warawan anticipates a further decline in the June MPI due to continued reductions in domestic car sales and subdued consumer spending, despite the positive impact of increased state budget expenditure stimulating economic activity in the latter half of the year.
The OIE revised its earlier 2024 MPI growth projections, now expecting either a stable performance or a 1% year-on-year increase, down from the initial forecast of 2-3% growth.
